A PAY deal set to cap teachers' pay levels has split two unions.

The National Union of Teachers said the two-and-a-half year pay deal spells more pay cuts for staff while the National Association of Head Teachers has welcomed the move.

The Government deal means East Lancashire's teachers' pay will increase from April next year by 2.5 per cent and by an average of three per cent over the next 17 months in the nationwide deal.

But union members say it is a "bleak prospect" for teachers.

Simon Jones, Blackburn with Darwen secretary for the NUT, said: "The Government offers less than the increases in average earnings. In each of the years since 1997 the increase in teachers' pay has been less than the increase in average earnings.

"The decision to freeze teachers' pay at inflation will increase the gap with other graduate employees, increase the problems of recruitment and retention and will be used to force schools to use unqualified persons."

But for the NAHT, the move is welcomed in a bid to stabilise school budgets.

David Fann, council member for Lancashire, said: "The deal makes sense when schools desperately need to control cost pressures and avoid job losses in the wake of this year's funding fiasco.

"But any attempt to squeeze performance related pay schemes for teachers is bound to lead to a revolt."

Teachers move up a PRP pay spine biennially with the next move scheduled for September 2004.